CGC Calls on Ontario Premier to Suspend Regulation O.98/12

Green companies at risk of bankruptcy as 'green layoffs' begin

TORONTO, June 19, 2012 /CNW Telbec/ -The Canadian GeoExchange Coalition (CGC), Canada's national industry
association for geothermal heat pump technology representing over 130
members in Ontario, wrote to Premier Dalton McGuinty yesterday asking
for the immediate suspension of Regulation O.98/12. The CGC has learned
of over 30 recent lay-offs at drilling companies and is expecting
additional layoffs for system designers, installers as well as product
manufacturers and distributors across the province.

The ill-conceived and hastily-written regulation hurts Ontario's green
energy industry, hurts Ontario's small business and unfairly targets
geothermal drilling. CGC has recommended that companies involved in
geothermal drilling more systematically follow long-established safety
guidelines used for comparable drilling activities within Ontario while
more thorough and fair regulation is drafted and publicly consulted.

On April 20, 2012, a driller encountered natural gas while drilling a
geothermal borehole in Oakville. This incident triggered a series of
events which led to the adoption of Ontario Regulation O.98/12. The
regulation requires drilling companies to apply for an environmental
compliance approval (ECA) per the Environmental Protection Act. For the
purpose of the Environmental Bill of Rights (EBR), ECAs are classified
as Class II instruments and are subject to a minimum of 45 days posting
on the Environmental Registry. As a result, as of June 19, 2012, there
will be no drilling for geothermal purposes in Ontario until at least
the end of August.

"This regulation was adopted in a few days without any industry or
public consultation. Government officials seem to be improvising rules
on a daily basis as they attempt to adapt the ECA process to geothermal
drilling," said Denis Tanguay, CGC President & CEO. "The Ontario
geothermal heat pump industry deserves a regulatory framework that is
developed through proper consultation. The current improvised
regulation is equivalent to a province-wide stop-work order for all
geothermal drilling for an extended and unknown period of time for no
valid technical, scientific reason," he added.

The CGC is also highly concerned that in an already tight and difficult
market, the regulation can create market imbalances among drilling
companies. This regulation has the adverse effect of helping the
strongest companies eliminate their competitors. It is not a desirable
outcome for the industry, consumers, or for the government.

The Canadian GeoExchange Coalition acts as the industry catalyst to
unite private and public sector stakeholders, and to expand the market
for geothermal heat pump technology in Canada. As the nexus of
information, training, certification, standards and public awareness,
we work to build the necessary infrastructure to foster Canadian
industry growth. Website: www.geoexchange.ca

ONTARIO GEOTHERMAL HEAT PUMP INDUSTRY BACKGROUNDER

There are more than 200 CGC Qualified Companies under the CGC Global
Quality GeoExchange Program in Ontario. Together, they employ thousands
of individuals - 300 of which are fully accredited by the CGC as either
residential designers or installers.

There are 30 CGC Qualified Drilling Companies in Ontario. In the past 5
years, the CGC estimates that between 8,000 and 10,000 vertical
geothermal boreholes were constructed in Ontario. These companies have
safely drilled and constructed the vast majority of these boreholes.
Meanwhile we estimate over 50,000 shallow boreholes are executed
annually using comparable drilling technique across Ontario for water
wells alone.

The economic activity generated by the ecoENERGY program alone (only
residential retrofits) is estimated at more than $300,000,000. CGC
estimates that about 90 % of the value of a GHP systems is money spent
on Ontario goods and services. This economic activity remains in
Ontario in every region of the province.

The geothermal heat pump (GHP) industry was hard hit by the 2009
economic downturn and has still not recovered. Significant electricity
price increases in the residential sector are also affecting geothermal
as a green energy option for Ontarians. The application of Regulation
O.98/12 impacts negatively geothermal companies working in the new home
sector and in the commercial sector - where vertical boreholes are more
frequent.

Between April 2007 and December 2012, under the ecoENERGY Retrofit -
Homes Program, the Canadian GeoExchange Coalition (CGC) certified
11,853 residential geothermal heat pump (GHP) systems in Ontario. Of
that number 1,813 were vertical borehole systems.

Through matching funds, the Government of Ontario provided approximately
$50,000,000 in financial assistance to Ontario home owners for the
installations of GHP systems.

About 68 % of the retrofits under the federal and provincial programs
replaced electricity and heating oil. The CGC estimates that about
8,060 homes are responsible for the reduction of approximately 50,000
tons of GHG emissions (CO2 eq.) annually.1

GHP activity in the commercial and institutional sectors was also strong
over the period. The CGC estimates that the level of activity -
calculated on a tonnage basis - was at least equivalent to the activity
in the residential sector. A significant portion of commercial systems
are equipped with vertical boreholes.

On May 14, 2012, the CGC announced the deployment of a new geothermal
loop installation course. This course focuses on geothermal
applications using HDPE pipes in conventional open loops, lake loops as
well as closed vertical and horizontal loops. The course is meant to
protect the integrity of both residential and commercial installations
over time and to promote best environmental protection and safety
techniques as well as reflect on safety, emergency procedures and
guidelines.

On May 23, 2012, the CGC announced an important addition to its CGC
Global Quality GeoExchange Program: a new geothermal quality program
designation for geothermal loop installers. The new CGC Loop Installer
accreditation is valid for both residential and commercial
installations.

Canadian GeoExchange CoalitionJune 19, 2012

________________________________1 Comparative Analysis of Greenhouse Gas Emissions of Various Residential
Heating Systems in the Canadian Provinces. Canadian GeoExchange
Coalition - April 2010.